Market Update 10/12/2020

Monday October 12, 2020



Corn futures gained nicely last week after a favorable USDA Report. Even though the yield was not lowered significantly the production dropped due to acres being reduced.  Of course, the key is that supplies continue to decline.  December futures tested resistance at 399 last night so it will be interesting to see where we go from here. December 21 futures are not as aggressive and getting over 400 will be critical.  Needless to say, this rally has made your revenue look much better.  Make an appointment with one of us and we can show you how knowing where you are makes decisions less difficult.


November soybean futures also had a banner week and made new highs for the recent rally.  This is good but the close Friday was somewhat disconcerting as the market backed up way too much into the close.  Now do not get me wrong these are extremely friendly numbers with the supplies at 290 mbu and stocks to use ratio below 7% which is key.  Now we have backed up another 4 cents from Friday’s close due probably to moisture forecast for Brazil.  Again, the key is the stocks to use ratio and that is positive but take advantage of these gains protecting your revenue.  The high-end analysts say that we are in a 1000 to 1100-dollar trading range.  Friday’s high was 1080.  Do I need to say more?


The December live cattle futures did not have a terrible week and the cash trade was reported mostly at 109 with an extreme top in Iowa of 110.  That is not terrible either.  Boxed beef movement continues to be huge at drastically lower prices but oh well, the producer was not getting any of that anyway.  So, I want to paint a rosy picture going forward with heavy cattle be reduced and demand both here and abroad is just fine.  Here is the but, the thing called a presidential election.  In my opinion why not do something with December and/or April put positions.  We can work out a put spread or even a naked put that will certainly get you through political unrest and worse. 

I am on vacation this week so if you cannot get hold of me call Sam or John at the office at 218.685.2059

Any statements of fact herein contained are derived from sources believed to be reliable, but do not purport to be complete.  No responsibility is assumed with respect to any such statement, nor with respect to any expression of opinion herein contained.  Futures trading is speculative and a substantial risk of loss exists.  The prices above may reflect those of the relevant spot contract.  Movement in the spot contract does not necessarily correlate to the movement of individual option premiums.  Past performances not necessarily indicative of future results